SW Legal studies in Business

Chat Room Postings About Public Company Could Not Support Libel Suit
Description Court dismissed a libel suit brought by a public company subject to critical remarks posted by various parties in an open chat room devoted to the company. The postings were the personal opinion of the participants in the chat room and were protected speech. No one reading the postings would think the material was anything other than personal opinion.
Topic Cyberlaw
Key Words Torts; Libel; Free Speech; Chat rooms
C A S E   S U M M A R Y
Facts After Global Telemedia went public in 1999, its stock bounced around. In 2000, various parties, defendants in this suit, began posting messages on the Raging Bull Message Boards, a financial website that runs chat rooms, each devoted to a publicly traded company. The chat rooms are freely open to anyone to read and post messages. The defendants, who did not use their real names on their messages, posted negative and allegedly libelous comments about Global, which sued them. Defendants moved to dismiss the suit.
Decision Motion granted. Statements made in a chat room about a publicly traded company involve matters of public significance and thus are exercises of free speech protected by California law. Once the defendant has established a prima facie case that his actions arose out of acts in furtherance of his right to free speech about a public issue, the burden shifts to the plaintiff to demonstrate a probability of success. Libel can only be based on false statements of fact, and not on opinion, regardless of who the speaker is. A reasonable reader of the postings in the chat room would not have expected defendants to be airing anything other than their personal views about the company and its prospects. There is no evidence that these posting affected the stock price of the company or otherwise harmed it. The suit may not proceed.
Citation Global Telemedia International, Inc. v. Doe 1, - F.Supp.2d - (2001 WL 314520, C.D. Calif., 2001)

Back to Cyberlaw Listings

©1997-2002  SW Legal Studies in Business. All Rights Reserved.